Boeing CEO Says It’s Time To Rebuild Relationship With Machinists

(Corrects to clarify that the agreement the machinists passed phases out the pension over time and replaces it with a company-funded 401(k) retirement plan.)

Boeing's Chief Executive Jim McNerney says he’s looking forward to the prospect of no strikes for the next decade by Washington state machinists. McNerney told Wall Street analysts it made the most sense to build the next version of the 777 jet in the Puget Sound region, as long as the workers accepted the company’s contract extension offer.

Machinists narrowly approved the deal that preserves job security but phases out their pension and replaces it with a 401(k) retirement plan. McNerney says his deputy, Ray Conner, is now trying to improve morale in the wake of the vote.

“Just as in the past, every few years we had to go through a period of rebuilding relationships, we now have an opportunity to do it for a 10-year period. And I think Ray and his team are reaching out, and I would also say that the union there is also reaching out,” McNerney said.

To hear the complete segment in which McNerney talks about rebuilding the relationship with the IAM, click here:

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A spokesman for District Lodge 751 of the machinists’ union, Bryan Corliss, says district president Tom Wroblewski hasn’t had any meetings with top Boeing managers since the vote on Jan. 3. Corliss says it’s possible McNerney was referring to meetings with the union’s international leaders.

But many machinists don't feel in the mood to rebuild yet. They're bitter that they were forced to accept a pension freeze at a time when the company's just reported record earnings per share and revenue, and has a record backlog of planes to build.

On the Facebook page Rosie's Machinists 751, one worker commented: "We give our lives to the service of this company and they repay us with a slap in the face."

On a conference call with Wall Street analysts and reporters, Dominic Gates of the Seattle Times asked McNerney why he and other top executives haven't taken cuts to their own compensation.

"Many shop floor workers and others in Washington state are pointing to your personal defined-benefit pension, which will pay out more than $3.6 million a year and asking where's the shared sacrifice from you and other top executives," Gates said. "What would you tell them?"

McNerney answered that the deal with the machinists was necessary for the company to stay competitive. And he hinted that other Boeing workers with pensions may be shifted to 401(k) retirement plans in the future, just like the machinists.

"We still have a very large pension obligation that we need to address over the next few years, and we will address it," McNerney said.

He says the company isn't prepared to discuss plans yet, but he said they'll deal with the pension changes in a "fair and equitable way."

As for McNerney's own pension, Boeing spokesman John Dern says it will be paid out over 15 years and was part of an agreement carried over from his prior employer, 3M. McNerney said nothing on the conference call about his own retirement benefits.